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Newsom Sues Trump Over Homeless Housing Cuts, Sends $56M to Foster Youth

Newsom sues the Trump administration over HUD policy changes and announces $56M in foster-youth housing grants to shore up local supports.

By Tracey Ashlee
Governor Gavin Newsom filed a lawsuit against the Trump administration on November 25, 2025. The legal action is part of a broader multistate challenge against new Department of Housing and Urban Development rules that drastically re-direct funding away from permanent supportive housing. According to the official California Governor's page, the state says the changes will “harm families” and threaten housing access for vulnerable Californians. The lawsuit joins a larger coalition of roughly 20 states contesting the policy shift, which critics say moves millions from long-term housing into temporary programs while adding new conditions on grantees. National reports, such as Politico, say the changes could affect hundreds of thousands of people who currently rely on permanent housing supports. The shift would affect them on a very basic level. Newsom’s office described the federal move as “cruel” and unlawful, arguing that it undercuts years of work to end homelessness by prioritizing housing stability over short-term shelter. The press release says California will use every legal tool to block the policy. Newsom didn't mince his words and stated, “While Donald Trump is busy hosting parties and showing off his gold-plated decor, Americans are worried about groceries, rent, and basic stability. Most families can’t fall back on inherited wealth or walk away from failure through bankruptcy, but they’re the ones stuck paying for his chaos and incompetence. For all Trump’s talk about others feeding at the trough, there’s really only one ‘piggy’ here and he’ll find it in his own gilded mirror.”  In 2024, California spent 90 percent of their $683 million in Continuum of Care funding on permanent housing project. Now, the Trump administration wants to cap the amount spent on permanent supportive and rapid housing t0 only use 30 percent of the CoC funds allocated to them. Newsom's office points out that it would directly impact the people needing homes. But it's not all grim news. On the same day Newsom filed suit, the state announced in an official California governor press release $56 million in local grant awards meant to strengthen housing access for foster youth. The funding will go to 54 counties where it will help young people leaving foster care find safe, stable places to live. State officials framed the grants as preventive. By investing now, they hope to reduce the number of young people who become homeless when they exit foster care. The Department of Housing and Community Development (HCD) notes the awards are timed with National Youth Homelessness Awareness Month. Newsom’s statements emphasize protecting youth and families while fighting the federal cuts in court. The two-pronged approach of suing the Trump administration in federal court and funding locally shows California's commitment for the vulnerable homeless and challenging policies that impact them. Permanent supportive housing can help to bring an end to chronic homelessness. It combines stable homes with services like mental-health care and job support. The federal changes  would decrease the funds available for the long-term Continuum of Care programs. That shift has drawn legal challenges and sharp warnings from city and state leaders.  California’s simultaneous investment in foster-youth housing aims to protect one of the groups most at risk of falling into homelessness. Whether the lawsuit succeeds will shape how much federal funding stays focused on permanent housing versus temporary or conditional programs.

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